I'm very reluctant to take leverage now. This index strategy in leverage of factor three was usual because you leverage up very high, you go down, leverage up very high, you go down. Now my leverage factor on the long side is max 1.3. and 1.4. It's like it's a lot of unexpected downside risk. Sometimes, especially as if you have a momentum and trend following strategy and you like to add up, for...
The advice that I have for traders that are looking to trade institutional money is… First, be aware that institutional money trades differently than we do. Most of the strategies we trade, they cannot trade because the ticket size is too big. Like our trend following system, which works very well because we can trade a lot of small cap stocks, it doesn't work for the big money. If you have 10...
Academic literature is important for trading because I studied financial economics and a Master of Science at Imperial College. It's called Risk Management and Financial Engineering. It was basically like a quantitative finance course, and I like to have very robust strategies. There are a lot of strategies in which there's so much research, trend following, momentum, seasonal strategies, even...
When developing new strategies, I get ideas from browsing around. I follow some experts and listen to Top Traders Unplugged, which are all high-quality institutional hedge fund managers and there's so much insight listening to them. There's also a guy who manages his own portfolio and mentioned Amibroker, he said, "Amibroker has a really good tool to use for stock and hours. Thus, I'm on the...
The learnings that I've had by trading for a living is having confidence in the systems. Last year, the return is not positive, this goes for a lot of trend following momentum traders. For one and a half years I'm in a drawdown and that takes a lot of confidence, emotional pain, especially when this is your main income, and trading is my main income. I have some other incomes, but not generating...
First contact was stock trading I got when I was 16 at an internship at a small insurance guy. He did a lot of technical analysis and a lot of chart reading and stuff. At that point I really liked it, but I lost touch with that. Then through my studies I did an internship at Institutional Asset Management Division from a private bank in Germany, Berenberg Bank. They did everything...
My favorite tool that I've learned since being in EST is Amibroker. I also like brute force optimization because it reminds me of what I did for the index strategies. I basically built the environment in Excel and VBA, which did a rolling forward brute force optimization like you have those windows every week. That's a weakness of Amibroker for the brute, for the walking forward. It also takes...
Introduction to The On-balance Volume IndicatorJoseph Granville, a luminary in technical analysis, revolutionized the field by introducing the groundbreaking On-Balance Volume indicator (OBV) in the early 1960s. Granville's quest was to develop a tool transcending traditional price and volume data, aiming to measure trading volume's significance in predicting price movements. This led to the...
If you have wondered what reverse stock splits are or how to profit from them, you are in the right place! In the dynamic world of stock trading, staying ahead and generating consistent returns requires not only positive expectancy trading systems and good position sizing, but also an understanding of various corporate actions and their implications. One such corporate action that has the power...
The capital market is known for its dynamics and volatility. There are various factors that can influence the performance of the stock market and even more the crypto market. One of these factors is seasonality. Seasonality is a term that encompasses reoccurring time-related price behavior effects. These effects can pertain to individual calendar months or specific holidays. The crucial aspect...
What Is Window Dressing in Finance?Window dressing is a concept in finance that involves manipulating financial statements or investment portfolios to make them appear more attractive to investors during reporting periods. While we have no direct evidence that window dressing in finance is common practice, it is well documented, and there are plenty of corporate accountants tasked with creating...
The financial markets can feel pretty chaotic and random at times, but within all of the chaos, there is order, and there are anomalies in price action that can be traded profitably - Turnaround Tuesday is one such market anomaly. This article explains the 'Turnaround Tuesday' trading strategy, quantifies the edge with backtested potential trading strategies and demonstrates the results from my...